Steen Jakobsen

On Feb.6, 2012, People’s Daily Online interviewed Steen Jakobsen, chief economist of Saxo Bank, who talked about China’s yuan and its role in China’s economic success.

The exchange rate of yuan has been the focus in international business. Some critics claim that the yuan is undervalued and China’s currency control gives its exporters an unfair trade advantage by making their products artificially cheap.

“I don’t think anything in life is black or white. I think it the combination of a lot of things. I think to make the excuse that China’s currency is too cheap is the only reason for China’s success is very wrong. And to some extent, it is disrespectful,” Steen Jakobsen said.

He said regarding European debt crisis and financial crisis in the United States, the West in the last 15 years did not invest exactly what is called productivity. And they did not become better and have the ability to compete with China. So instead of competing with China, they almost end up with trying to copy the business model. But it is wrong for the West to do because they cannot compete with labors. It is clearly that it is cheaper in China.

Talking about the currency in China, he said that there are price varieties, the market decide accordingly because it has the link with dollar. So when the dollar becomes more expensive, of course the Chinese products become expensive as well. But to make it the only excuse and just point fingers to China’s economic growth is not right because the U.S. also fails to invest in infrastructure, in the education and the ability of their work to compete.

The currency issue may be 90 percent of the story, but not the whole. “As always in people’s life that you need take responsibilities in your life and I need to take responsibilities in my life, the main blame lies in us,” he said, “In the West, it is another way around. In the West, you always find another one to put the blame on and unfortunately, that’s the politics in the Western world that we call it blame game instead of creating solutions.”

He said that China did really well as the product hub in the world. Chinese people may hold that “if you produce something, we will be competitive because we can produce better, faster, and in higher quality”. And what China really has is its huge population, a great ability to produce things and that’s one of the key reasons.

He said China’s promotion of opening-up, as well as its macro and political adjustments have greatly boosted China’s economic development. “I think it is right to say we need engage more with the world because in the last 10 to 15 years, China has become a big nation: the second biggest in GDP, and populist biggest nation, and has a very big role to play on the world stage,” he said .

Steen Jakobsen was appointed Saxo Bank's Chief Economist in March 2011. Mr. Jakobsen returned to the Bank after two years' absence. During that time he has been Chief Investment Officer for Limus Capital Partners. Prior to his departure in early 2009, Mr. Jakobsen was with Saxo Bank for almost nine years as Chief Investment Officer. Mr. Jakobsen has more than 20 years of experience within the fields of proprietary trading and alternative investment.